Avon: Figuring Your Profit Each Campaign
A Simple Formula
The following details are based upon my own personal experience. Each person Avon business is different and you have to adjust for those differences.
Total customer sales $500
Total regular sales x earning rate = $350.00 x 40% = $140.00
Limited* Sales x limited earning rate = $150.00 x 20% = $ 30.00
Total Profit $170.00
In Avon the only thing you are required to buy are brochures
20 brochures cost less than $10 less $10.00. This cost includes 1 pack of outlet brochures. Mark and other assorted flyers are included free in your order if you sell Mark and from the flyers! The more you sell from the flyers, Mark, and/or Tiny Tillia, the more Avon will send you free.
Shipping fee is normally less than $10 less $10.00
Add 75¢ per customer for order fee – $7.50
If you have less than 10 customers you are not making a profit!
If you have at least 20 customers, your customers are paying for your 20 brochures and the cost of your shipping.
Total Profit $157.50
You do not figure sales taxes either way as that is just a pass through figure. You charge the customer the proper tax and Avon charges you tax and pays it to the state/local tax board
Cost of gas should be less than $10 if you plan your deliveries right = less $10
I deliver one day a week. I am gone less than 4-5 hours which include showing demos, talking to my customers, etc. If I miss the customer, they know I will be back next Tuesday or they can stop by my house and pick up their order. The second Tuesday is order day for the next campaign and all orders still in my possession and not paid for goes back!
I do not take customers more than 10 miles from my house, unless I have more than just one customer in that area. The cost of gas would eat up my profit. Instead I pass them on to one of my downline reps in that area. Win-Win situation for both of us as I get leadership commission from their sales without having the cost of delivering to just one customer and they get the actual profit of the sale.
Total Net Profit $147.50
Demos, samples, as well as whatever you want comes out of your profit. None of these items are required so this is a discretionary or optional expense.
Demo Reinvestment Program: Invest in 3-5 demos. Show, then sell demos. (You might sell them to yourself, but that is YOUR decision.) Take that money and reinvest it into more demos. 3 to 5 demos is what you should be purchasing and showing. What you show, you sell. Last year I purchased the $200 wedding band. I sold 7 of them by “flashing” them at my customers. 7 x $200 = $1,400 x 20% profit = $280 profit, less the $119 cost of the demo gave me a net profit of $161, plus a beautiful ring. I am still flashing the ring... every time I sign up a new rep to let them know Avon sells fine jewelry. Now, the same ring sells for $250.00 and PC and above gets a 40% earning rate.
I don’t buy samples because:
- the most bought samples are fragrance and there are smelly pages in each brochure
- skin care samples are included in Preferred Preview bundles. Serious reps are signed up for PP
- the DSM gives out free samples at the sales meetings. If you are not attending your sales meetings, you are not serious about learning how Avon operates
This is a very simplest formula onhow to figure the basic profit on your Avon business each campaign. To figure the real profit in your business, you must include such expenses as the cost of your car, phone, computer and internet, and so forth.
Remember to keep tract of all of your expenses for your tax return. You are not an employee of Avon so you must fill out a 1040 Schedule C Profit and Loss Statement and include it with your tax return at the end of every year. Mileage will be your biggest expense. Also include your meals and any other expenses, such as office supplies.
I make a folder for each campaign and on the front of the folder I write down all expenses for that campaign so it will be readily available during tax time.
Cost of sales can be figured from the Avon invoice. Expenses must be recorded as they occur or you will forget. Don’t forget to get a receipt for all meals and other expenses.